Marketing Matters is a blog that tells marketing stories from an industry, academic and student's perspective. We confront and debate today’s business trends. Views expressed by the blogs do not necessarily reflect the views of the University of Sydney Business School.

Monday, 30 November 2015

Last week officially marked the end of my second semester studying on the Master of Marketing. As the academic year draws to a close it also marks the end of the examination period and the final assessments of the year.

To celebrate this success, the University of Sydney Business School were very kind to throw an end of year reception for the program at the Darlington Centre. A great time was had by all in attendance, from both the current cohort and alumni of the Masters of Marketing.

Joining the student body were also notable members from industry including Nicholas Ridis, Board Director for the Australian Marketing Institute. In addition, there was a three-way panel chaired by the course director, Pennie Frow, with Senior Consultant of Potentiate Global, Stephen Jenke, and Head of Marketing Intelligence at Tabcorp Kasia, Wilton-Wanstall. This provided a great opportunity to gain new insights into current marketing practices and an opportunity to network in a fun and relaxing environment.

On behalf of the rest of the cohort I would like to say thank you to Terry Beed for organising a wonderful evening. I would also like to thank Associate Professor Geoff Frost who opened the event along with Associate Professor Pennie Frow who has been so instrumental in shaping the course. I would like to say a special thank you to our lecturers who have passed on their wisdom over the last ten months.

I would also like to extend my congratulations to our alumni Taran and Seray who received awards for their excellent performance in the Marketing Consultancy Project. Both Lauren and myself were delighted to be recognised for our contributions to the social media for the course. We have very much enjoyed posting on the Marketing Matters blog and will continue to do so in the year ahead.

Early last week many of us were also fortunate to visit the new home of the University of Sydney Business School known as the Abercrombie Building. This state-of-the-art building holds an impressive 550-seat lecture theatre, three 300 seat lecture halls, eight 100 seat study rooms, 33 seminar rooms, a learning hub and 1500 square meters of informal learning space.

What struck me most about the building was the amazing amount of natural light that lit up each room along with the excellent building structure designed to foster a blended learning environment. The new home will certainly add a great deal to the Darlington community and will be a fantastic home for the Business School for many years to come!

Thursday, 19 November 2015

Coming to the end of another academic year we are pushed to go through some mentally challenging yet very relevant and interesting topics. As marketers we need to understand what is happening around us and need to up to date with the trends that will impact our careers on a global scale.

Today the Marketing industry is drastically different to what it was a decade ago. We now live in a rapidly evolving technological age defined not only by constant change but by true paradigm shift where consumers have become producers, the concept of innovation is the “default” and data, which enables us to layer multiple data sets to come up with a more dynamic and comprehensive picture of consumers has become more important than ever.

With this being said what is the future of marketing? What are some of the future trends that will impact the work we do and how we operate? How can we use an ever increasingly complex consumer landscape to understand behaviours and consumption?

To understand these questions it is important to see what has happened on a global scale in relation to both the past and also what will happen in the foreseeable future. Social tensions will impact how we live, how we feel about the future and will further provide us marketers, brand and services with an opportunity to help Australians improve their lifestyle

Ipsos Australia and New Zealand has recently released a list of the top 10 mega trends that they believe will shape the world’s future.

1.Dynamic populations – which represent both opportunities and threats to society. For example, two thirds of the global middle class will live in Asia by 2030 creating significant opportunity for Australian brands and services to tap into this growing, affluent market. Understanding these consumers will be crucial to tap into the vast wealth that is being created.

2.Growing opportunity and growing inequality – while some of us are becoming wealthier others are becoming poorer. A class divide is becoming increasingly apparent in Australia for the first time. We are witnessing growing inequality in Australia especially through housing affordability in our largest cities creating a generation of have-nots who will struggle to enjoy the same lifestyle as their parents.

3.Megacities: urban superpowers or human disasters – people are flocking to our largest cities, creating more pressure on infrastructure, housing and jobs, while also representing social challenges. Travel times are increasing creating potential future productivity concerns for our nation. Sydney is about to embark on an infrastructure boom, but will it be enough?

4.Increasing connectedness and decreasing privacy – we’re spending more time online and buying more while we’re there but many of us worry about who – government or business – can track our ‘digital footprint’ (what we search for, what content we consume, what we say and to whom and what we buy) – and how long that footprint will live online.

5.Healthier and sicker – life expectancy is increasing every year and creating new industries and services across Australia. While people are living longer and trying to live healthier lifestyles, levels of obesity are climbing and our environment is getting sicker – but will it be enough to force us to change our habits?

6.Rise of individual choice and decline of the mass market – we have unrivalled choice and it’s growing faster than ever before. The proliferation of international brands opening in Australia gives us greater choice and lower prices. Some Australian icons are now struggling.

7.Rise of the individual and decline of social cohesion – the rise of ‘me-culture’ vs concern and responsibility for the collective ‘us’ is set to continue. Meanwhile on the personal front, significant social changes are underway reinventing the very concept of the ‘average family’. Many families are headed by single parents, while single households are growing quickly and fewer people are getting married (and later).

8.Cultural convergence and increasing extremism – how well are Australians coming together? Sydney is the most multicultural city in the world and a great example of brands/services/foods where you can buy almost anything. However, like many other countries, we are also witnessing increasing social tension around immigration and the threat of home grown extremism.

9.Always on and off the grid – being ‘always on’ is driving some to ‘go off the grid’ for relief, relaxation and a chance to reconnect with the present moment and seek a greater work/life balance. Social consciousness continues to grow in importance. Companies that have a powerful social conscience are seen as compelling organisations to be part of. Flexible working environments will grow quickly over the next 10 years.

10.Public opinion as a revolutionary force – social media has heralded the role of mass social activism or ‘clicktivism’ where global social movements can appear overnight via the click of the ‘like’ button on Facebook. Protests are on the rise again with the public demanding to be more involved to express a point of view to impact decisions.

Monday, 16 November 2015

The UK’s fastest growing coffee chain Pret A Manger has caused quite a stir this week with news that they will donate their entire Christmas digital marketing budget to charity.

In the weeks leading to Christmas campaigns usually go in to overdrive to capture increased consumer spending. This year will be no different for Pret, but with another focus in mind. Shunning the traditional Christmas campaign-spending spree, the company have instead opted to dedicate there marketing channels and digital media spend to five separate charities. The charities form part of the Pret Foundation Trust and will also receive 50p from each sandwich sold in store over the holiday period.

Source: http://www.fruitnet.com/

The campaign officially kicked off last Monday where a store in London’s Broadwick Street was decorated as a giant Christmas present. Customers were encouraged to break through the Christmas wrappings to receive the free festive turkey and stuffing sandwiches inside.

To raise awareness of Pret’s Foundation, the company launched a campaign called ‘A little Thank You’ on both its website and social media. This features news about the charities along with pictures and videos of the trusts' work in the community. The group director of Pret said “We’re delighted to donate our marketing channels and media, both physical and digital, to the Pret Foundation Trust and the charities we work with. It’s our way of saying ‘a little thank you’”.

Back in April I wrote about Pret’s unusual approach to marketing, giving away free coffee to customers at the discretion of the staff. Although unusual, it was a great way to build customer loyalty in the ultra competitive coffee market. I think this is another classic example of ‘being noticeably different’. Using a non-traditional approach to advertising will win the support of customers. Rather than being bombarded with sales messages in the festive period, the company will use its money to increase awareness of important issues. More than two million customers will see the charity logos on coffee cups and in store advertising.

By taking this bold decision, Pret is helping to raise the profile of its charity partners and alleviate poverty by directly tackling the issue of homelessness. This is a great move to continue building good will among its community of customers, while raising an anticipated £1.6 million pounds for charity.

Tuesday, 10 November 2015

In part II we continue our countdown of the twenty most common decision making biases and heuristics.

11. Loss aversion

We kick off with experience of loss aversion, which has been tied to the endowment effect, sunk cost trap and even the status quo bias. The pain of losing is felt stronger relative to the pleasure of gaining. How much you ask? Almost twice as much! This makes people twice as likely to take risks to avoid losses.

12. Prospect theory

The behavioural model of Prospect theory is a central component of loss aversion. The prospect theory model shows how people make decisions between choices that involve risk or uncertainty. The “S” shaped graph is steeper for losses than for gains, which supports the theory of loss aversion.

Source: https://econfix.files.wordpress.com/

13. Gamblers fallacy

Past results do not represent future outcomes. The gamblers fallacy occurs when a person assumes a run of results one-way means that the other result is more likely. If you flip a coin ten times in a row landing on heads every time, it does not mean the next flip will be any more likely to result in it landing on tails. Similarly, a sports team who looses a number of games in a row is no more likely to win the next game based on the justification that they are ‘due a win’.

14. Peak-end rule

The two moments which are most memorable to people are the peak and the end. This has huge implications on marketing, particularly in the way that a product or service is evaluated.

15. Halo effect

The halo effect bias results in a person perceiving the qualities in one thing relating to the perceived qualities of another. The halo effect is frequently present in advertising where a company associates itself with another to receive its positive benefits.

Source: http://www.brandingstrategyinsider.com/

16. Herd behaviour

When people or groups of people end up doing what others are doing, this is usually a result of herd behaviour. This mentality is particularly prevalent in the finance industry where stock market bubbles appear due to investors following each others' behaviours.

17. Hindsight bias

Have you ever watched a movie with a friend who exclaims at the end, ‘I knew it all along!’. Everything is easier in hindsight. This bias can distort judgments about the probability that an event will occur because the outcome of the event is perceived as predictable.

18. Habit

Many decisions we make are often as a result of habit. These patterns of behaviour build over time in specific situations. The repetition builds associative learning with triggers than cue typical responses.

19. Optimism bias

On the whole, people are much more likely to overestimate the probability of a positive event occurring and underestimate the probability of a negative event. This is often associated with the term ‘rose coloured glasses’.

Source: https://cdn.psychologytoday.com

20. Representativeness heuristic

Representativeness is a general heuristic where by a person judges the probability that characteristic A belongs to group B by judging the degree to which A represents B. This assumption is largely based on stereotyping when judging how one thing represents another. The representativeness heuristic is highly prevalent where detailed scenarios can serve to mislead people in to error.

Friday, 6 November 2015

In this special two-part blog I am going to be counting down the top twenty biases and heuristics which impact decision-making. As marketers we make decisions every single day. From our decision to get out of bed in the morning to investing in a new promotional idea, we are constantly making decisions.

Of course, some decisions are more important than others, but decision-making often involves both conscious and unconscious thoughts. All humans are flawed when it comes to making decisions. Most decisions are subject to biases or are made using heuristics, essentially rules of thumb to make quick estimate answers. Heuristics are by no means systematic, but provide a practical solution to meet an immediate goal.

Increasing our understanding of biases and heuristics improves our ability to identify and minimise those that are a liability to decision-making. So with no further ado, its time to start the countdown!

Source: http://www.blacktower.com

1. Status quo bias

People generally prefer things to stay the same and look for decisions that involve the least amount of change. The status quo bias explains why statistically people are likely to favour a default option when overwhelmed with a number of choices.

2. Choice overload

Choice overload often gives us decision fatigue, which makes us more susceptible to heuristics and biases. Giving customers too many choices can result in unhappiness, as it often results in discomfort. For example, ordering food from a take away menu with too many items can result in choosing the same food as last time.

3. Endowment affect

The endowment affect is closely linked to the status quo bias. Once something is owned its value becomes much higher in value to the owner. Overvaluing a good that we own can explain why so many people find it hard to part with an item once they have established ownership of it. 4. Sunk cost trap

Have you ever ordered too much food at a restaurant and then over eaten to get your moneys worth? If so, you would likely have encountered the sunk cost trap. This is when we consider already invested resources when making decisions. Rather than only considering the future costs and benefits, we often consider the resources already invested.

Source: http://www.inflexusmgmt.com/

5. Cognitive dissonance

Dissonance is a painful experience resulting from a lack of harmony. Cognitive dissonance therefore occurs when a person hold two thoughts which are psychologically inconsistent. Contradicting thoughts can result in irrational and biased decision-making due to the tension, which motivates people to seek harmony. High commitment purchases such as houses, cars or expensive vacations may result in high levels of cognitive dissonance. It is important to consider the impact of post purchase dissonance on customer satisfaction when marketing and selling products.

6. Overconfidence

Overconfidence is one of the most prevalent biases in decision-making. As humans we like to create an illusion of control and overestimate the extent to which we can achieve certain outcomes. Overconfidence stems from exaggerating the amount to which you can control an outcome.

7. Over precision

Fuelled by overconfidence, we tend to be over precise in our judgments. This is particularly prevalent when we are making decisions that are outside of our areas of expertise. Allowing more margin for error can help to remedy the over precision bias, particularly in times of uncertainty.

8. Anchoring

The anchoring bias is the tendency to be unconsciously influenced by irrelevant numbers when making decisions. The anchor can be set internally from our own perceptions or externally from an outside source. The implications of anchoring on marketing can be substantial! For example, if you were to place a promotional sign limiting customers in a supermarket to ten cans of soup each, the external anchor would likely result in customers purchasing more cans than they had originally intended.

9. Confirmation bias
Confirmation bias is the tendency to focus on information that supports our beliefs rather than seeking information that contradicts it. One of the best ways to avoid confirmation bias is to deliberately seek out opposing viewpoints when making important decisions. 10. Availability heuristic

People will often make decisions based on the availability of information that comes to mind. If an event or outcome is easy to imagine, it is much more likely to impact decision-making. On the contrary, events that are difficult to imagine may also reduce the likelihood of the event occurring. A vivid experience can also alter a person’s perception and thus decision-making.

Wednesday, 4 November 2015

Imagine having a drink that’s packaging changes with the temperature as you drink it. Pretty cool right. Well, we all know Coca-Cola is infamous for their innovative marketing campaigns, and with their newest “Coke come alive” campaign said to launch this summer, you will most certainly NOT be disappointed!

At the beginning of this month, Coca-Cola South Pacific announced the launch of a new summer campaign featuring packaging which will change colour based on the drink’s temperature. This design, based on temperature control, is a first for Coke and will further feature on most of their packaging sizes including the 250ml cans and the 390ml, 600ml, 1L, and 1.25L bottles and frozen cups. The image recognition technology that will be used will also be able to recognise ‘Come Alive’ colour packs across other Coke products: Diet Coke, Coke Zero and Coke Life.

Some might be thinking how does it work? The “Coke come alive” campaign will see the drink packaging change colour when the drink reaches “optimal temperature for enjoyment”. This new marketing ploy will hopefully aim at introducing new consumers to the drink with particular focus of the younger market and also aim at engaging existing consumers who are loyal to the Coke brand.

In the process of providing cross-channel content to its consumers via social media, Coke has brought in help from teenage celebrities and key-teen influences in attracting a younger demographic.

“Coke come alive” will be part of a multi-million dollar integrated campaign that will push and evolve the "Color your summer" campaign. It will include image recognition technology where consumers are able to take an image of their drinks when it changes colors to win unique experiences, content and event access.

As we know, a successful campaign must continually innovate and integrate a range of mediums to ensure it effectively gets its brand message out to its consumers. To further drive its summer campaign, Coke will strategically implement outdoor advertising in locations deemed as “youth hot spots”, as well as point-of-sale merchandising in stores nation wide.

Group marketing manager, Dianne Everett says, “We are thrilled to launch the next exciting phase of the Coke Come Alive campaign. We believe it will provide a platform which will excite people about this iconic brand over summer”. I personally cannot wait to go out and buy one of these super cool coke bottles during summer.

About the Bloggers

Alyce Brierley is a student in the Master of Marketing Program at the University of Sydney Business School. With a degree in Creative Industries (QUT), she has recently returned to Australia after working for the last six years in Paris as Copywriter and an English Language Consultant. Alyce is a culture, travel, food, and wine enthusiast with a love for learning languages. She is currently working in partnership with a tech start-up in the wine industry as a wine blogger.

Bowie Chen is from China and a current student in the Master of Marketing program at the University of Sydney Business School. Bowie has several years experience working in FMCG marketing, media (esp. TV station), and consulting firms.

Hazel Chen has 8 years work experience in the Beverage Manufacturing Industry with the role as Technical Leader and Manager, covering Logistics, Marketing, Laboratory and Prototyping function. As a part of Master of Marketing program, she has the confidence to consolidate all the experience with Marketing study to understand overall market to a great extent.